The Study On The Judicial Intervention In The Corporation Autonomy

Chapter I introduces the research background, status and methodology in the subject area of judicial intervention in the corporation autonomy. In China, corporate disputes have become more complicated and the number of cases is rising. Due to the seriously laggard legislation, the judicial intervention in the corporation autonomy is either too much or too little under different circumstances. Therefore, it is urgent to establish clear principles and standards for judicial intervention. Research has been conducted on this topic in China and abroad, but the current domestic research outputs still have many shortcomings. This dissertation applies the comparison, historical, empirical and semantic research methodologies.Chapter II illustrates the basic theories of corporation autonomy and judicial intervention. Corporation autonomy is the cornerstone of corporation governance, bearing great economic and legal significance. However, corporation autonomy is not without limitation. External intervention is necessary in view that corporation autonomy is paralysed by the failure of external market and internal governance. External intervention could be carried out in multiple forms like disciplinary regulation, legislative, executive and judicial intervention. Judicial intervention has inimitable advantages, the emphasis on which must be reasonably coordinated with other forms of intervention. The diversified evolution of the judicial intervention of different countries did not impede the convergence of the evolutional results. Over-regulation is as least effective as excessive autonomy. Corporation autonomy and judicial intervention are the two basic means of corporate governance, the former of which is still the unshakable foundation. Judicial intervention could only play its role in case of the failure of corporation autonomy.Chapter III deals with the nature and guiding principles of judicial intervention on corporation autonomy. Although the judicial intervention is inevitable, it must be carried out in discreet manner following the principles. Judicial self-restraining is the premise for intervening corporation autonomy. Judicial intervention shall always stay away from complicated and difficult questions like certain issues provided by the Charter of the corporation, the allocation of corporation profits and business decision of the corporation etc. It is featured as being passive, final and interactive. Some basic principles must be borne in mind such as the principle of efficiency and comparative advantage, classified intervention, consultation priority, procedural interview and other remedies being exhausted first. In order to avoid the negative influence brought by over-regulation, the establishment of some preventing mechanisms such as preceding demand procedure limitation, warranty for litigation expenses, and stockholders’ liability for malicious litigation, seems quite urgent.Chapter Ⅳ discusses the modes and procedures of corporation autonomy. There exist various corporation governance modes, thus resulting in different modes of judicial intervention. The UK and U.S. represent the extensive intervention mode. Germany, Japan and East Asia countries do not rely much on judicial intervention. Confusing intervention mode is found in our country, in which insufficient and excessive intervention co-exist. The intervention procedures can be classified as non-litigation procedure, direct action procedure and derivative action procedure, which are often closely entangled. The present Chinese legislative provisions are quite defective, resulting in the insufficient access and inefficiency of judicial intervention on corporation autonomy. This dissertation puts forward some suggestions on the legislations on the three primary procedures in view of foreign legislative modes.Chapter Ⅴ discusses the limitation of judicial intervention on the operation of shareholders’ conference. Shareholders’ conference is vital to the exercise of shareholders’ rights. Whether the shareholders’ conference can be smoothly convened and make a resolution determines the exercise of shareholders’ proprietary rights to the corporation. Judicial intervention must be authorised in case that the shareholders’ conference is unable to be convened, the shareholders’conference is stuck in a deadlock, or the shareholders’ conference makes a defective resolution. If the shareholders’ conference is unable to be convened and the judicial intervention is to stand in, inner corporate remedies must be firstly availed of. Only if inner remedies are exhausted, can the shareholders apply for judicial convening. If the shareholders’ conference is stuck in a deadlock, the judicial intervention must follow the guidelines such as self-remedy taken as a priority, classified intervention, business subjects support, and preventing abusive actions. Some concrete institutions are to be established, including actions to dissolve a corporation, compulsory purchase of shares, and instructing the third party to walk in. If the shareholders’ conference makes a defective resolution, it can be amended by the consent of all shareholders, withdrawal, or ratification of the resolution. Only if the inner remedial measures are exhausted, can judicial intervention come in. The court cannot change the concrete resolution in lieu of the corporation’s organization of will. It shall be able to make the decision that the resolution is cancelled or invalid, which is similar to the administrative actions’ judgment.Chapter Ⅵ analyzes the judicial intervention in the fulfillment of stockholders’ right. To prevent corporate operators from infringing upon corporate owners’ right, every country has legislation to intervene in the fulfillment of stockholders’ right. In China, there are many cases involving the infringement upon the right-to-know of stockholders. Therefore, this chapter analyzes how to keep the balance between judicial intervention and corporation autonomy, and the concrete procedures to perform judicial intervention in order to protect the right-to-know of stockholders. It is recommended that legal requirements should be put in place to stipulate the procedures to achieve both passive and active self-fulfillment of stockholders’ right-to-know. Should such right cannot be protected through the above recommended self-fulfillment procedures, stockholders can apply to the judicial agencies for assigning inspectors, which is a form of indirect judicial intervention in a non-litigation manner, or file a lawsuit as a direct judicial intervention.The last chapter is the conclusion of the dissertation. It summarizes the objectives, principles, modes and procedures of judicial intervention in the corporation autonomy. Targeted at the reoccurrences of disputes involving stockholders conference operation and stockholders’ interests protection, this chapter further puts forward the concept and limits to be applied in the various mechanisms of judicial intervention in corporation autonomy.